Nicole Lapin

Because that number sounds a lot better than the rates many of us are seeing right now.

Listen, it all sounds fine and dandy until you think about how lending works.

really works so today i'm breaking it down first things first this is a proposal it is not a rule it is not a law it is not a done deal there is no executive order there's no legislation no regulation actually in effect so if you log on to your credit card account today literally nothing has changed credit card interest is simply out of control americans owe a total of 1.2 trillion dollars in credit card debt the average apr in the us is just over 21 according to the federal reserve

But some cards are charging 28, 29, even 30 percent or more.

That means you could be paying hundreds of dollars a month and barely even touching the actual balance.

And with prices rising across the board, food, housing, transportation, insurance, this kind of high interest debt starts to feel like a trap that you cannot escape.

So if you have a big credit card bill, you are probably loving this.

Banks are not.

And here's the plot twist.

Credit card holders shouldn't be loving this either.

From the banks POV, credit cards are a huge profit center.

So that is a big part of their opposition to this.

But here's the real reason that capping interest rates is a potential problem for all of us.

It might limit access to credit.

credit.

Now, this sounds unrelated, but here's the link.

Your credit card APR is based on risk.

Higher credit score, lower APR.

Lower credit score, higher APR.

It's basically a seesaw.